Land Laws in Thailand

Ownership of land in Thailand is governed by the Land Code BE 2497 (1954),
the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975)
and the regulations set forth by the Ministry of the Interior.

Although Thai law stipulates that a foreigner may not own land in Thailand in
his name, he has the right of ownership of buildings only. If a foreigner wishes
to purchase land in Thailand to build a property, he has 2 options:

1. The land is purchased on a 30-year leasehold with an option to extend the
lease for further 30 year periods. Possession of the land is assured by virtue
of the fact that property occupies the land. The lessor cannot seize the
property upon expiration of the lease, as the property is separate from the
land.

In order to be enforceable, any lease for a period longer than three years
must be registered at the Land Department, which involves payment of a
registration fee and stamp duty based on a percentage of the rental fee for
the whole lease term. The original registered lease remains in force and effect
even if the property is sold. Both parties can contractually agree to renewals,
but this right can't be registered at the Land Department.

2. If a foreigner is going to operate a business in Thailand then he may
purchase the freehold of the land through his Thai Limited Company.
The land will be owned by the Thai Company, not by the individual.

Limited Liability Company

This form of purchasing property is the most popular with foreign investors
as the Articles of Association can be varied to allow greater protection for
foreign minority shareholders where majority Thai ownership is required under
the Alien Business Law.
Thai law requires that 51% of the shares be held by Thai juristic persons,
however, any company with more than 40% foreign interest that purchases
land will be investigated by the Central Land Office in Bangkok (under section
74 of the Land Code) to ensure that the company has not been organized in
an attempt to circumvent the prohibition against foreign ownership of land.

This results in the foreign ownership of the company being limited at 39%
(only if buying land), but with the recommended changes of the Articles of
Association, the foreigner can be the only director of the company, and the
only person of the company who can commit or bind the company in any
contractual dealings (buy or sell land and house), effectively giving the
minority shareholders control over the company.


History of Land Owning Law in Thailand

In the beginning, i.e. the Sukhothai era, most of the land in Thailand was in
the possession of the people, who reserved the right to individually use said
land and to transfer it to their heirs.
Later, in Ayuthaya and Ratanakosin era, the land was owned by the Kings.
The people had to request a royal grant in order to obtain land.
At present, the possession of land has to be in accordance with the principle
land administration laws. There is the supervising Land Department and some
land is still controlled by other governmental authorities, such as the Forestry
Department, which is responsible for the management of land in forest zones,
Sor. Por. Gor. is responsible for land in reformed land zones, District Offices
and Municipalities (Or. Bor. Tor) look after public land zones.

All land under the control of these government departments have no effect as
to the rights of people who owned land before the government appointed the
land as a forest, public or reformed zone. The law has o retrospective effect
on the individual's rights to land under the law before it became a forest zone.
That individual person still maintains its right to the land.


There are two Types of Rights to Private Land

The first is the right of possession (Possessoary right), i.e. people who
possess and use the benefit of land will have the right to possess such
land under the Civil and Commercial Code.

The second is ownership by a person who has a title deed and documents
concerning the land.

Sor. Kor 1
is a notification form of possessed land. There is a certificate to show the
right to the land. This maintains existing rights. Notification of Sor. Kor 1;
on December 1954, the government advised all land proprietors to notify such
possession to the government as per form Sor. Kor 1.
After it was proven that such a proprietor had possessed the land legally and
used the benefit of the land, then the government would issue Nor. Sor. 3 or
Nor. Sor. 3 Gor as evidence. Nor. Sor. 3 and Nor. Sor. 3 Gor are legal
certificates provided that any name shown on the title is a person who has
the right to the land (according to the principle law). This right will be
recognized by the law and can be used as evidence in any dispute with an
ordinary person or the government.

Por. Bor. Tor 6
is evidence by the issuance of a tax number for the purpose of paying tax for
using the benefit of the land. Such land has not yet been assessed as to the
person's right to possess such land. In the event that there is not title for the
land, then it may be land in a conserved forest, public land or land which
existed under Sor. Kor 1, Nor. Sor 3, Nor. Sor. 3 Gor or a title deed. Any of
these titles must have a Por. Bor. Tor 6 as tax must be paid, the same as any
land without a title. Purchase of such land is possible by handing over the
possession of the land to the buyer along with the tax nuber. The right to the
land under Por. Bor. Tor 6 can not be used as evidence in any dispute with
authorities.

Sor. Por. Gor 4-01
is an allotment of land from the land reformative committee, and under no
circumstances may this land be bought or sold. It may be transferred to
heirs only.

Nor. Sor. 3
is an instrument certifying the use of land issued by the government to the
proprietor of land not a possessoary title, i.e. it is confirmed by law that a
person holding Nor. Sor. 3 has the legal right to possess the land. This land
title can be used as a legal document or to use the benefit of the land as an
owner. Nor. Sor. 3 is a floating map with no parcel points. It is issued for a
specific plot of land and it is not connected to other land plots. This causes
problems in verifying the land area. Any legal acts must be publicized for 30
days.

Nor. Sor. 3 Gor
is a legal land title with the same legal basis as Nor. Sor. 3.
The difference being that Nor. Sor. 3 Gor has parcel points on the map, and is
set by using an aerial survey to set the points and the land area. It is possible
to verify a nearby land area. It always uses the same scale of 1:5000. There
is no need to publicize any legal acts, and it is possible to partition (divide)
the land into smaller plots.

Land Title Deed (Chanot)
is a certificate for ownership of land. A person having their name shown on
the deed has the legal right to the land, and can use it as evidence to confirm
the right to government authorities. The title deed has been issued by using
GPS to set the area and boundaries of the land, which is a very accurate
method. Any legal acts may be done immediately, as per the right of
ownership. Land partition of more than 9 plots must be carried out
according to the Land Allotment Law, Section 286.